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Airbnb and the emerging issues for units

Chances are you have heard of Airbnb, the online property letting service connecting those who have spare rooms, houses or other spaces with guests looking for a place to stay.

Online letting services have grown rapidly in recent years.

Airbnb works by ‘hosts’ creating a free listing and promoting their property, and themselves, with detailed descriptions and photographs. They decide what they will charge – a nightly, weekly or monthly rate. Guests search the listings for accommodation and pay a service fee for each reservation.

The appeal of such online services is that property owners can rent out their property without the need for agents, tenancy agreements or licences. It’s not just property owners who are utilising these online services, tenants are turning to Airbnb to let out spare rooms and even couches to supplement their income.

Private short-term letting can have a negative impact on a body corporate, particularly in small schemes and those with permanent residents and no on-site manager. In those types of buildings, impacts can include increased noise, illegal parking, overuse of shared facilities such as pools and gyms, nuisance, damage to common property and safety and security issues.

Like the taxi industry disrupter Uber, the law is struggling to keep pace with the booming “sharing economy”.

If you own a unit, can you be stopped from letting your unit via Airbnb?

Where a property is a lot in a community titles scheme in Queensland, there is currently no requirement to obtain the body corporate’s consent to let the property on a short-term basis, and there are currently no specific regulations for short-term online rental services.

A recent Victorian Supreme Court decision found that owners' corporations could not make rules to ban lot owners from letting their lots for short term stays of less than 30 days. This decision will have consequences for bodies corporate and unit owners, particularly those who want to list their apartments on Airbnb.

So if bodies corporate cannot ban owners from renting their properties on Airbnb, how can bodies corporate better regulate the potential problems arising from short-term stays?

A body corporate can self-regulate, to a certain extent, by adopting by-laws that are enforceable against owners and occupiers of the building. Bodies corporate may introduce by-laws that restrict behaviour, noise, parking and the use of the common facilities.

However, even if the body corporate adopts what appear to be effective by-laws to combat the difficulties often associated with transient tenants, enforcement of those by-laws is likely to be problematic.

As an owner, you should review your insurance for any accommodation being offered to make sure insurance coverage extends to the property being rented out on a short-term basis. You should also check for Council regulations as different council areas have different rules governing what they will and will not allow in terms of home sharing and short-term rentals.

What about owners who are concerned with tenants listing spare rooms for rent on Airbnb?

Currently, there is nothing in the legislation that prevents a tenant from listing a spare room (or couch) on Airbnb for short-term letting.

However, a recent decision of the Supreme Court of Victoria has found in favour of a landlord who sought to terminate a residential tenancy because her tenants had been letting out the property on Airbnb without her consent. This case however centred around the fact that the tenants were letting out the whole of the property, not just a spare room, and no longer lived in the property. The court was careful to make no ruling on the general legality of Airbnb agreements.

For that reason landlords should consider inserting specific conditions prohibiting grants of licences to occupy as well as subletting if they are concerned about tenants utilising Airbnb for properties.

If you would like more information or to discuss the impacts Airbnb is having on your strata development and how by-laws may assist you, or if you are concerned to prevent your tenants from using Airbnb, please contact us on 07 5443 9988 or [email protected].

Argon Law is a Sunshine Coast law firm based in Maroochydore. We are commercial lawyers, body corporate lawyers and property lawyers and are eager to assist you in any way we can.

Always ensure you seek professional advice for your specific circumstances. The above is not advice and is intended to be general in nature only.